WEEKLY
Mortgage Rate (30-Year Fixed): 4.67% (as of 3/31)
MONTHLY
Existing Home Sales: 6.7% (January 2022)
New Residential Sales: 16.2% (January 2022)
Median Sales Price for New Houses Sold: $423,300 (January 2022)
Construction Spending: +1.3% MoM (January 2022)
New Residential Housing Starts: 1.6 million (January 2022)
New Residential Housing Completion: 1.2 million (January 2022)
QUARTERLY
Homeownership Rate: +65.5% (4Q21)
Rental Vacancy Rate: +5.6% (4Q21)
Sources: NAR, BLS, Federal Reserve Bank, MBA
Note: Rates listed are estimates and may not reflect actual rates depending on term, sponsor location, and other factors involved.
10. Sarasota-Cape Coral tops emerging self-storage markets across the U.S. list
Yardi Matrix reports that among self-storage markets across the country, Sarasota-Cape Coral scored the highest in terms of rentable space under construction and second in terms of total inventory, YoY rent growth and YoY population change. Annual construction completions are forecasted to reach 1 million sq ft over the next five years. The list is completed by Austin, Jacksonville, Reno and Pensacola – all exhibiting strong demographic and housing trends since the start of the year.
9. Unconventional properties now a hot market for CRE investors
The surge in real estate prices of apartments, warehouses and other commercial properties has influenced more investors to look into buying unconventional properties – small business offices, gas stations, medical clinics and corner food stores, according to a report by The Wall Street Journal. At the start of the pandemic, many investors avoided these real estate since small businesses are more likely to shut down. However, more investors have become strategic to reduce the risk that comes with small tenants. Most of them focus on one industry instead while some offer the option to purchase the property at fixed price after a few years.
8. 7 out of 20 markets for annual apartment rent increase are in Florida
The latest report from real estate analytics firm CoStar reveals that 7 out of the top 20 markets for YoY rent increase are found in Florida. This includes the top three – Naples, Sarasota, Fort Myers (which are all on the west coast). Naples had a rent increase of 38.4%, which puts the average rent close to $2,000. Builders are pushing up supply to cater to surging demand for apartments in the southeast regional market.
7. Office market vacancies at 60% in major markets
CRE managed security firm Kastle has revealed that major markets are still below levels of recovery in their office markets. Office occupancy over a 12-week trend according to the firm are still below 60%. Austin (52.9%), Houston (49.1%) and Dallas (49.1%) had the highest occupancy rates this week despite an economy battered by distress and uncertainty. Still, Kastle is confident that the occupancy rates will continue to improve in the coming months as the number of office workers returning to their workplaces are slowly rising to pre-Omicron levels.
6. Industrial real estate take the lead in recovery
More investors are looking into industrial spaces instead of apartment buildings, offices, retail shops, and hotels, according to research by the National Association of Realtors (NAR). Sales for all types of commercial real estate decreased in 2021 but not for land (+3%), industrial warehouses (+2%), and industrial flex spaces (+1%). The NAR further emphasized that industrial land and warehouse investments will continue to experience a surge in terms of sale at 5% and 4%, respectively.
5. Home prices rose 19.2% YoY in January
The January 2022 S&P CoreLogic Case-Shiller Index that was released this week reveals that home prices surged 19.2% YoY in January, up from18.9% the previous month. Some of the metros that experienced the highest price hikes include Phoenix (32.6%), Tampa (30.8%), and Miami (28.1%). On the opposite side, the least increases were recorded in Chicago, Minneapolis and Washington, D.C. S&P Dow Jones Indices predicted in an interview with CNBC that mortgage rates of home prices are likely to rise soon as a result of recovering economic activity and the Fed’s interest rate hikes.
4. U.S. employment rate improves in March
A total of 431,000 jobs were added in March that helped push unemployment numbers down to 3.6% from 3.8% the previous month. The Wall Street Journal reports that the improving employment rate has helped boost wages but it is still not enough to match the surge in inflation. The Labor Department cites the declining cases of COVID-19 has brought back more consumers in restaurants, stores and public areas, leading more businesses to re-open.
3. 30-year mortgage rates rise to highest in almost 4 years
The average rate for a 30-year fixed-rate home loan reached 4.67%, according to Freddie Mac this week. This is the highest rate since December 2018. While higher mortgage rates are most likely to slow down home buying, analysts are skeptical about it as the U.S. home boom amidst higher prices is still on its track. According to The Wall Street Journal, the Mortgage Bankers of America also noted an increase in lender willingness to extend home loans in February, indicating strong buying demand from consumers.
2. Inflation rises to 40-year high in February
The Federal Reserve reported this week that the U.S. inflation rate has reached 6.4% in February YoY, being the fastest surge since 1982. The central bank reiterated that the inflation outlook, which had already become dire at the start of the year, was further exacerbated by the Ukraine-Russia war and the sanctions imposed by the West on Russia’s economy. The Fed is closely monitoring MoM changes in inflation after futures after Brent crude broke $100 per barrel.
1. Industrial property market’s low vacancy rate to continue for at least 2 years
Jones Lang Lasalle (JLL) released a report that the all-time low in industrial space availability at 3.4% will likely remain below 4% at least in the next two years. Some of the biggest growth in industrial space has been recorded in California, Dallas-Fort Worth and Chicago. However, most of the facilities are already aging with more than 75% at least two decades older. Tenants, however, are seeking high-tech industrial properties and warehouses, which older facilities cannot cater to.
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